For example, if you don't have an exception and ,000 of your distribution is taxable, you'll owe a 0 penalty.
Mark Kennan is a writer based in the Kansas City area, specializing in personal finance and business topics.
For traditional IRAs, qualified distributions are those taken after you turn 59 1/2 years old.
For Roth IRAs, you have to be 59 1/2 years old and you have to have had the Roth IRA open for at least five years.
Actually liquidating the account is relatively simple, but the tax reporting is more complicated.
Complete a distribution request form and submit it to your financial institution.
For traditional IRAs, if you're not 59 1/2, your distribution is non-qualified.
However, before you liquidate and throw a party, consider both the taxes and the early-withdrawal penalties that apply to non-qualified distributions.
Liquidating an IRA can be done at any time and for any reason.
However, the tax implications of liquidating your IRA depends on whether you have a traditional or Roth IRA and whether your distribution is qualified.
When a business operates as a partnership, the partners each report a percentage -- which is usually the same as their percentage of ownership -- of annual earnings on their personal returns.
As a result, the tax effects of a partnership that makes liquidating distributions only impacts the partners who receive them.